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May 10, 2010

Android Overtakes iPhone In Operating Software Market

by Sam Savage

Google has taken over Apple's spot as the second most popular smartphone software provider in the U.S. during the first quarter of the year.

According to NPD Group, smartphones featuring Google's Android operating system accounted for 28 percent of U.S. smartphone unit sales in the first quarter, behind top ranked Research in Motion, which had a 36 percent share of the market.

Smartphones are increasingly replacing no-frills cell phones for many U.S. consumers.

The devices have created a prime battlefield for technology companies looking to ensure a good position in the growing market.

Hewlett-Packard Co. said last month that it would pay $1.2 billion to acquire Palm Inc., which sells two smartphone models based on its WebOS operating system. Microsoft Corp. unveiled a pair of smartphones last month and recently launched a revamped version of its mobile operating system.

Apple sold over 51 million iPhones since its 2007 launch, and the company says that over 200,000 apps are available for the phone.

Apple's iPhone, which is available exclusively on the AT&T wireless network in the U.S., dropped to third place in the first quarter as its share of the smartphone operating system market remained flat quarter-over-quarter at 21 percent share.

Google offers its Android software to other phone-makers, something Apple has yet to do. Google said in April that a dozen vendors currently offer 34 different devices that feature the Android software.

NPD analyst Ross Rubin told Reuters that the new position of Android phones during the first quarter are due to the promotions by Verizon Wireless, which he said has expanded its buy-one-get-one offer.

"As in the past, carrier distribution and promotion have played a crucial role in determining smartphone market share," said Rubin.

Despite the Android software gaining momentum, Google's Nexus One phone has not yet seen the same success.

Analytics firm Flurry estimated in a report earlier this year that Google sold about 135,000 Nexus One phones in the first 74 days on the market, compared to 1 million iPhones that Apple sold in the same time frame when it initially released the device in 2007.